July 31, 2013, Toronto — Small business confidence increased smartly in July, according to the Canadian Federation of Independent Business (CFIB).
The CFIB's Business Barometer index rose almost five points to 64.2, making up nearly all the ground lost in the previous four months.
“Canada’s small and mid-size business owners are considerably more optimistic than they were just a month ago, and the current index reading is the best since February,” said Ted Mallett, CFIB’s vice-president and chief economist. “Most of this turnaround is the result of much better numbers out of Ontario. Interestingly, the recent floods did not have a significant net impact on Alberta’s numbers, which would suggest the province is already getting back on track.”
Entrepreneurs in Saskatchewan (71.2) are the most optimistic in Canada, although post-flood Alberta (66.8), Newfoundland and Labrador (66.7) and now Ontario (66.5) are close behind. British Columbia (64.9) is above the national average, while New Brunswick (58.9), Manitoba (58.0), Nova Scotia (57.0) and Quebec (56.4) are all below. Prince Edward Island (49.2) remains at the bottom end of the scale.
“We see steady or improving business confidence in most sectors, particularly construction and manufacturing, with retail the only sector notably on the downside,” added Mallett. “A number of factors, including changes in pricing and hiring plans, new orders, capital spending, customer demand, and labour availability suggest an improvement in business performance, which is good news for the Canadian economy.”
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance.
Past results show that index levels normally range between 65 and 70 when the economy is growing at its potential.
Findings are based on 1,135 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey from July 1 to 17. Results are considered statistically accurate to +/- 2.9 per cent 19 times in 20.
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